Cypress posts Q1 EBITDA loss of $17.4 million

(Telephony) Cypress Communications, an Atlanta-based building services provider, yesterday announced a first quarter 2001 EBITDA loss of $17.4 million, which was double the loss posted in first quarter 2000.

However, the company said its loss for this quarter is 22% less than the $22.2 million EBITDA loss posted in fourth quarter 2000, and is evidence that its ongoing restructuring and cost reduction efforts are working.

Cypress announced in January that, due to the drying up of the capital markets, it was going to reduce its staff by 40% to 45% from a headcount at the time of about 660. At the same time, the company said it was going to reduce its planned retail footprint from 28 markets to 13.

“Obviously, the capital markets are pretty much shut off to telecom companies across the board, so we decided to eliminate our reliance on those markets improving and to make ourselves fully funded,” said a Cypress spokeswoman.

In March, Cypress announced it was going to cut an additional 200 employees by the middle of the year, and further cut back its retail effort to the seven markets that account for about 90% of its customers and 91% of its revenue. The company will continue to provide wholesale services in 28 markets where it resells components of its in-building fiber optics network infrastructure to other service providers.

“Shortly after we made the first announcement, the capital markets continued to be depressed and we realized that … we had to see the light at the end of the tunnel,” said the spokeswoman, who added that, thanks to the staff and market cutbacks, the company is fully funded to 2003.

She acknowledged the company’s relatively flat revenue growth quarter to quarter—Cypress posted revenues for fourth quarter 2001 of $4.7 million compared with $4.3 million for fourth quarter 2000—but said the company’s restructuring plan had something to do with that.

“Probably a good bit of our focus was lost during the first quarter because we were concentrating on … coming up with this fully funded plan,” she explained. “And we had already closed down some markets … so we lost some revenue there. Our revenue growth wasn’t … awful by any means. Under the circumstances, we’re pretty satisfied where we came out with things, and we expect that to continue.”

The spokeswoman added that the company has no plans right now to alter its revenue guidance of $18.5 million for full-year 2001.